As inflation and high credit card debt continue to affect American consumers, the trend of using 'buy now, pay later' (BNPL) plans is set to soar this holiday season. Adobe Analytics predicts that shoppers will spend 11.4% more using these services compared to last year, with an estimated $18.5 billion in purchases made through BNPL from November 1 to December 31. This payment option is particularly attractive to younger consumers and those with low credit scores, as it often involves soft credit checks and does not impact credit scores. However, consumer advocates caution that using credit cards to fund BNPL purchases can lead to compounded debt due to interest and fees. Moreover, the ease of multiple BNPL transactions can lead to overspending, as consumers may not fully grasp the total financial impact. Retailers benefit from increased sales, with studies indicating that customers spend up to 20% more when BNPL is available.
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